Why doesn't the Army want prior service over E5?

It is all related to the end strength of the US Army. All recruiting and retention policies are levers to control the authorized strength that congress pays the Army in their budget.
Example:
1. When there is a need to grow the Army, levers such as recruiting bonuses and relaxing prior service restrictions can be implemented.
2. When the Army is downsizing or maintaining, levers are implemented to restrict entrance, lower bonuses.
3. Since we are an all volunteer Army these polices control the end strength, which we are not allowed to go over. To go below end strength is also a bad thing for those held accountable.

I've heard several things on this and surprised it hasn't come up earlier.
Also just so happens u had this same question since I wanted to go active Army after the AF pushed me out in 2012.
There's a speculative answer that was given to me by a weary MSG in the guard, as to why the Active wasn't picking up priors. He said that the government already had pliable minds right out of high school that wanted to be uncle Sam's little soldiers. Where as a prior servicemen wouldn't be so pliable and although they may be able to pass the school (AIT, Tech school, etc) priors knew the in's and out's of the military and could be a bad influence on the young pliable minds of the new recruits.
Even though I'm in the guard, I still want active duty and am always looking for an open slot on the active side that'll fit me in. Sometimes they're there, but if I don't jump on it, poof, they gone.
As for a not so conspiring story, force reduction and no war to speak of means less slots available and less priors going back into active. :-D

The more senior you are, the more they have to pay you, the less billets there are to place you and the less potential overall time you may have left to serve.